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Please give me an accurate answer for C & D Question 2 (30 Points) Data for Barry Computer Company and its industry averages follow. a.
Please give me an accurate answer for C & D
Question 2 (30 Points) Data for Barry Computer Company and its industry averages follow. a. Calculate the indicated ratios for Barry. b. Construct the DuPont equation for both Barry and the industry. c. Outline Barry's strengths and weaknesses as revealed by your analysis. d. Suppose Barry had doubled its sales as well as its inventories, accounts receivable, and common equity during 2012. How would that information affect the validity of your ratio analysis? (Hint: Think about averages and the effects of rapid growth on ratios if averages are not used. No calculations are needed.) Barry Computer Company: Balance Sheet as of December 31, 2012 (In Thousands) Cash Receivables Inventories Total current assets Net fixed assets Common equity Total assets $77,500 Accounts payable $129,000 336,000 Notes payable 84,000 241,500 Other current liabilities 117,000 $655,000 Total current liabilities $330,000 292,500 Long-term debt 256,500 361,000 $947,500 Total liabilities and equity $947,500 Barry Computer Company: Income Statement for Year Ended December 31, 2012 (In Thousands) Barry Computer Company: Income Statement for Year Ended December 31, 2012 (In Thousands) Sales $1,607,500 Cost of goods sold Materials $717,000 Labor 453,000 Heat, light, and power 68,000 Indirect labor 113,000 Depreciation 41,500 1,392,500 Gross profit $ 215,000 Selling expenses 115,000 General and administrative expenses 30,000 Earnings before interest and taxes (EBIT) $ 70,000 Interest expense 24,500 Earnings before taxes (EBT) $ 45,500 Federal and state income taxes (40%) 18,200 Net income $ 27,300 1.3x RATIO BARRY INDUSTRY AVERAGE Current 2.0x Quick Days sales outstanding 35 days Inventory turnover 6.7x Total assets turnover 3.0x Profit Margin 1.2% ROA 3.6% ROE 9.0% Total debt/total assets 60.0% a Calculation is based on a 365-day year. Question 2 (30 Points) Data for Barry Computer Company and its industry averages follow. a. Calculate the indicated ratios for Barry. b. Construct the DuPont equation for both Barry and the industry. c. Outline Barry's strengths and weaknesses as revealed by your analysis. d. Suppose Barry had doubled its sales as well as its inventories, accounts receivable, and common equity during 2012. How would that information affect the validity of your ratio analysis? (Hint: Think about averages and the effects of rapid growth on ratios if averages are not used. No calculations are needed.) Barry Computer Company: Balance Sheet as of December 31, 2012 (In Thousands) Cash Receivables Inventories Total current assets Net fixed assets Common equity Total assets $77,500 Accounts payable $129,000 336,000 Notes payable 84,000 241,500 Other current liabilities 117,000 $655,000 Total current liabilities $330,000 292,500 Long-term debt 256,500 361,000 $947,500 Total liabilities and equity $947,500 Barry Computer Company: Income Statement for Year Ended December 31, 2012 (In Thousands) Barry Computer Company: Income Statement for Year Ended December 31, 2012 (In Thousands) Sales $1,607,500 Cost of goods sold Materials $717,000 Labor 453,000 Heat, light, and power 68,000 Indirect labor 113,000 Depreciation 41,500 1,392,500 Gross profit $ 215,000 Selling expenses 115,000 General and administrative expenses 30,000 Earnings before interest and taxes (EBIT) $ 70,000 Interest expense 24,500 Earnings before taxes (EBT) $ 45,500 Federal and state income taxes (40%) 18,200 Net income $ 27,300 1.3x RATIO BARRY INDUSTRY AVERAGE Current 2.0x Quick Days sales outstanding 35 days Inventory turnover 6.7x Total assets turnover 3.0x Profit Margin 1.2% ROA 3.6% ROE 9.0% Total debt/total assets 60.0% a Calculation is based on a 365-day yearStep by Step Solution
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